Examples of recent projects:

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  • Worked with ‘Tier 1’ consulting partner
  • Issues found with weekly employees and certification
    • Corrections identified
    • Consulting partner addressed underlying processes issues


Confirmed AE processes and calculations were correct

  • Produced report for pension scheme trustee & governance board


Checked the accuracy of the payroll AE module

  • Confirmed accuracy of system calculations
  • Identified minor data errors and rounding differences
  • Audit results were shared with the Pension Regulator


Multiple issues identified

  • Confirmed incorrect AE basis applied for c.500 employees
  • Banded earnings also incorrectly applied
  • Employer pension contribution shortfalls of c.£500,000 identified
  • Re-ran AE from staging date to calculate pension contribution corrections
  • Identified that payroll provider software failed to auto-enrol employees at age 22
  • Partner advised on system & process changes to prevent future problems


Multiple issues identified

  • Incorrect employer and employee contributions started following a change of personnel in the payroll department
  • Employer pension contribution shortfalls of c.£90,000 identified
  • Human error confirmed as cause of the ongoing AE errors
  • Errors started to occur in BAU AE processes two years after staging date
  • Re-ran AE for an 18 month period and produced corrections
  • Data used for calculation of compensation for investment returns


Checked AE compliance as part of the integration of an acquisition

  • Confirmed AE calculations were correct
  • Minor data issues resulting from human errors were corrected
  • Opt out processes failed. Some opted out employees were still contributing to scheme
  • Opt outs corrected and employee repayments calculated


Multiple issues found

  • Employee & employer pension contribution calculation errors
  • Differences identified between pension contributions calculated and the contributions received by pension provider
  • Re-ran AE from staging date to produce pension contribution corrections
  • Provided data for calculation of additional investment return compensation
  • Partner recommended system & process changes to prevent future errors
  • 90% of issues were due to ongoing human errors

Why do employers check their AE compliance?

  • New FD’s & HRD’s reviewing pension & AE arrangements
  • Businesses that suspect they may have compliance issues and are concerned about the enforcement action by the Pension Regulator (tPR)
  • M&A preparation / due diligence to eliminate risk and the need for warranties to cover  potential hidden AE liabilities which are not checked during annual audits
  • Concern that tPR are now using Payroll RTI data from HMRC to identify employers with AE compliance failures
  • The Pensions Regulator compliance and enforcement teams work with other agencies when employers are investigated (e.g. HMRC, National Minimum Wage and VAT). 

Please email one of the Sanctum Directors, Mark Ellis or John Campbell to find out more.